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<SEC-DOCUMENT>0000950137-02-006855.txt : 20021227
<SEC-HEADER>0000950137-02-006855.hdr.sgml : 20021227
<ACCEPTANCE-DATETIME>20021227160401
ACCESSION NUMBER:		0000950137-02-006855
CONFORMED SUBMISSION TYPE:	N-30D
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20021031
FILED AS OF DATE:		20021227
EFFECTIVENESS DATE:		20021227

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST
		CENTRAL INDEX KEY:			0000884152
		IRS NUMBER:				363810337
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-30D
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-06567
		FILM NUMBER:		02870392

	BUSINESS ADDRESS:	
		STREET 1:		ONE PARKVIEW PLAZA
		STREET 2:		VAN KAMPEN INVESTMENTS INC
		CITY:			OAKBROOK TERRACE
		STATE:			IL
		ZIP:			60181
		BUSINESS PHONE:		6306846774

	MAIL ADDRESS:	
		STREET 1:		VAN KAMPEN INVESTMENTS INC
		STREET 2:		ONE PARKVIEW PLAZA
		CITY:			OAKBROOK TERRACE
		STATE:			IL
		ZIP:			60181

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VAN KAMPEN MERRITT MUNICIPAL OPPORTUNITY TRUST
		DATE OF NAME CHANGE:	19920929

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VAN KAMPEN AMERICAN CAPITAL MUNICIPAL OPPORTUNITY TRUST
		DATE OF NAME CHANGE:	19960102
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>c73205nv30d.txt
<DESCRIPTION>ANNUAL REPORT DATED 10/31/02
<TEXT>
<PAGE>

<Table>
<S>                                                 <C>
                                  Table of Contents

                                           OVERVIEW
                             LETTER TO SHAREHOLDERS       1
                                  ECONOMIC SNAPSHOT       2

                                PERFORMANCE SUMMARY
                                  RETURN HIGHLIGHTS       4

                              PORTFOLIO AT A GLANCE
                                     CREDIT QUALITY       6
                      TWELVE-MONTH DIVIDEND HISTORY       6
                                   TOP FIVE SECTORS       7
      NET ASSET VALUE AND COMMON SHARE MARKET PRICE       7
                   Q&A WITH YOUR PORTFOLIO MANAGERS       8
                                  GLOSSARY OF TERMS      11

                                     BY THE NUMBERS
                           YOUR TRUST'S INVESTMENTS      12
                               FINANCIAL STATEMENTS      23
                      NOTES TO FINANCIAL STATEMENTS      28
                     REPORT OF INDEPENDENT AUDITORS      34
                         DIVIDEND REINVESTMENT PLAN      35



          BOARD OF TRUSTEES AND IMPORTANT ADDRESSES      37
                       RESULTS OF SHAREHOLDER VOTES      38
                    TRUSTEE AND OFFICER INFORMATION      39
</Table>

Look to Van Kampen as a time-tested partner.
              NOT FDIC INSURED  MAY LOSE VALUE  NO BANK GUARANTEE
<PAGE>

 OVERVIEW

LETTER TO SHAREHOLDERS
November 20, 2002

Dear Shareholder,

Market changes are inevitable and impossible to predict. This is why investors
may be best served by having a long-term portfolio, allocated among several
types of assets. Through asset allocation, you may mitigate the effects of
short-term fluctuations in individual investments.

Your financial advisor can help you stay the course with your long-term plan.
Together, you can periodically revisit your asset allocation, and confirm that
it is still suited to your individual needs. Or, if your objectives have
changed, your financial advisor can help you modify your portfolio.

Whether you're building or simply fine-tuning your portfolio, we encourage you
to look to Van Kampen as a time-tested partner. Consistent with our belief in
the importance of asset allocation, we offer a wide range of investment
products, each managed with discipline and integrity.

                  We appreciate the opportunity to help you and your loved ones
                  enjoy life's true wealth--family, friends and life's daily
                  happiness.

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investment Advisory Corp.

                                        1
<PAGE>

ECONOMIC SNAPSHOT

THE ECONOMY
ECONOMIES GENERALLY DO NOT GROW IN A STRAIGHT LINE, AS WAS EVIDENT THROUGHOUT
THE REPORTING PERIOD. ON THE HEELS OF THE SECOND QUARTER'S STRONG GROWTH, THE
TREND SHIFTED TOWARD A REDUCED LEVEL OF ECONOMIC ACTIVITY IN SEPTEMBER AND
OCTOBER 2002.

COMPANIES, ESPECIALLY THOSE IN MANUFACTURING, CONTINUED TO EXPRESS RELUCTANCE TO
EXPAND INVENTORIES AND PAYROLLS. AS THEY'VE DONE THROUGHOUT MOST OF 2002,
CONSUMERS TOOK ADVANTAGE OF THE LOWEST MORTGAGE AND FINANCING RATES SEEN IN
DECADES. THE MONTHS-LONG HOME AND CAR BUYING SPREES CONTINUED IN OCTOBER, BUT
CONSUMER CONFIDENCE STATISTICS--A KEY INDICATION OF ECONOMIC ACTIVITY IN FUTURE
MONTHS--REVEALED A DRAMATIC DROP IN SENTIMENT.

THIS UNEXPECTED DIP IN CONFIDENCE HEIGHTENED INVESTORS' CONCERNS ABOUT THE
UPCOMING HOLIDAY SHOPPING SEASON. ADDITIONALLY, IT GAVE INVESTORS REASON TO
BELIEVE THE FEDERAL RESERVE OPEN MARKET COMMITTEE (FOMC) WOULD CHOOSE TO LOWER
RATES AT ITS UPCOMING MEETING IN EARLY NOVEMBER.*

MANY INVESTORS ALSO PROVED WARY OF THE WEST COAST'S DOCKWORKERS' LABOR DISPUTE,
THE RESULTING LOCK-OUT--AND THE POTENTIALLY NEGATIVE IMPLICATIONS IT COULD HAVE
ON THE ECONOMY. WHILE THE PRESIDENT'S INVOCATION OF THE TAFT-HARTLEY ACT IN
EARLY OCTOBER ENABLED DOCKWORKERS TO RESUME THEIR DUTIES--AND ALLOWED
MERCHANDISE TO MOVE THROUGH THE PORTS AND INTO THE STORES--MANY INVESTORS FEARED
THE DELAY WOULD IMPACT SALES AND, ULTIMATELY, PROFITABILITY.

AGAINST THIS BACKDROP, INFLATION LEVELS REMAINED WELL-CONTAINED AS CRUDE OIL
PRICES EXPERIENCED A DRAMATIC DROP.

*NOTE: THE FOMC CUT INTEREST RATES BY 50 BASIS POINTS ON NOVEMBER 6, BRINGING
THE INTENDED FEDERAL FUNDS RATE TO 1.25%--A 40-YEAR LOW.

                                        2
<PAGE>

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES

(September 30, 2000--September 30, 2002)

[BAR GRAPH]

<Table>
<Caption>
                                                                      U.S. GROSS DOMESTIC PRODUCT
                                                                      ---------------------------
<S>                                                           <C>
Sep 00                                                                            0.6%
Dec 00                                                                            1.1%
Mar 01                                                                           -0.6%
Jun 01                                                                           -1.6%
Sep 01                                                                           -0.3%
Dec 01                                                                            2.7%
Mar 02                                                                            5.0%
Jun 02                                                                            1.3%
Sep 02                                                                            4.0%
</Table>

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(October 31, 2000--October 31, 2002)

[LINE GRAPH]

<Table>
<Caption>
                                                                       INTEREST RATES                       INFLATION
                                                                       --------------                       ---------
<S>                                                           <C>                                <C>
Oct 00                                                                      6.50                               3.40
                                                                            6.50                               3.40
                                                                            6.50                               3.40
Jan 01                                                                      5.50                               3.70
                                                                            5.50                               3.50
                                                                            5.00                               2.90
Apr 01                                                                      4.50                               3.30
                                                                            4.00                               3.60
                                                                            3.75                               3.20
Jul 01                                                                      3.75                               2.70
                                                                            3.50                               2.70
                                                                            3.00                               2.60
Oct 01                                                                      2.50                               2.10
                                                                            2.00                               1.90
                                                                            1.75                               1.60
Jan 02                                                                      1.75                               1.10
                                                                            1.75                               1.10
                                                                            1.75                               1.50
Apr 02                                                                      1.75                               1.60
                                                                            1.75                               1.20
                                                                            1.75                               1.10
Jul 02                                                                      1.75                               1.50
                                                                            1.75                               1.80
                                                                            1.75                               1.50
Oct 02                                                                      1.75                               2.00
</Table>

Interest rates are represented by the closing midline federal funds target rate
on the last day of each month. Inflation is indicated by the annual percentage
change of the Consumer Price Index for all urban consumers at the end of each
month.

Source: Bloomberg

                                        3
<PAGE>

       PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of October 31, 2002)

- -------------------------------
NYSE Ticker Symbol - VMO
- -------------------------------

<Table>
<Caption>
- -----------------------------------------------------------------------
<S>                                                        <C>      <C>
One-year total return(1)                                     11.36%
- -----------------------------------------------------------------------
Five-year average annual total return(1)                      8.03%
- -----------------------------------------------------------------------
Ten-year average annual total return(1)                       7.90%
- -----------------------------------------------------------------------
Life-of-Trust average annual total return(1)                  7.38%
- -----------------------------------------------------------------------
Commencement date                                           4/24/92
- -----------------------------------------------------------------------

Distribution rate as a % of closing common share market
price(2)                                                      7.22%
- -----------------------------------------------------------------------
Taxable-equivalent distribution rate as a % of closing
common share market price(3)                                 11.76%
- -----------------------------------------------------------------------
Preferred share (Series A) rate(4)                           2.050%
- -----------------------------------------------------------------------
Preferred share (Series B) rate(4)                           1.600%
- -----------------------------------------------------------------------
Net asset value                                              $17.48
- -----------------------------------------------------------------------
Closing common share market price                            $16.04
- -----------------------------------------------------------------------
One-year high common share market price (10/04/02)           $17.25
- -----------------------------------------------------------------------
One-year low common share market price (03/28/02)            $14.75
- -----------------------------------------------------------------------
</Table>

                                        4
<PAGE>

(1) Total return assumes an investment at the common share market price at the
    beginning of the period indicated, reinvestment of all distributions for the
    period in accordance with the Trust's dividend reinvestment plan, and sale
    of all shares at the closing common share market price at the end of the
    period indicated.

(2) Distribution rate represents the monthly annualized distributions of the
    Trust at the end of the period and not the earnings of the Trust.

(3) The taxable-equivalent distribution rate is calculated assuming a 38.6%
    federal tax bracket effective for calendar year 2002.

(4) See "Notes to Financial Statements" footnote #5, for more information
    concerning Preferred Share reset periods.

    A portion of the interest income may be taxable for those investors subject
    to the federal alternative minimum tax (AMT).

    Past performance is no guarantee of future results. Investment return,
    common share market price and net asset value will fluctuate and Trust
    shares, when sold, may be worth more or less than their original cost. An
    investment in the Trust is subject to investment risks, and you could lose
    money on your investment in the Trust. As a result of recent market
    activity, current performance may vary from the figures shown. For more
    up-to-date information, please visit vankampen.com or speak with your
    financial advisor.

                                        5
<PAGE>

               PORTFOLIO AT A GLANCE

CREDIT QUALITY

(as a percentage of long-term investments)

<Table>
<Caption>
As of October 31, 2002
<S>                    <C>     <C>
- - AAA/Aaa............  70.2%   [PIE CHART]
- - AA/Aa..............   7.0%
- - A/A................  17.8%
- - BBB/Baa............   3.5%
- - Non-Rated..........   1.5%
<Caption>
As of October 31, 2001
<S>                    <C>     <C>
- - AAA/Aaa............  65.2%   [PIE CHART]
- - AA/Aa..............  11.2%
- - A/A................  18.1%
- - BBB/Baa............   3.8%
- - BB/Ba..............   0.6%
- - Non-Rated..........   1.1%
</Table>

Based upon the credit quality ratings as issued by Standard & Poor's Credit
Market Services/Moody's Investor Services, respectively. Subject to change
daily.

TWELVE-MONTH DIVIDEND HISTORY

(for the year ended October 31, 2002, for common shares)
[BAR GRAPH]

<Table>
<Caption>
                                                                         DIVIDENDS                        CAPITAL GAINS
                                                                         ---------                        -------------
<S>                                                           <C>                                <C>
11/01                                                                   $  0.0830                           $ 0.0000
12/01                                                                   $  0.0830                           $ 0.2410
1/02                                                                    $  0.0875                           $ 0.0000
2/02                                                                    $  0.0895                           $ 0.0000
3/02                                                                    $  0.0895                           $ 0.0000
4/02                                                                    $  0.0895                           $ 0.0000
5/02                                                                    $  0.0895                           $ 0.0000
6/02                                                                    $  0.0925                           $ 0.0000
7/02                                                                    $  0.0925                           $ 0.0000
8/02                                                                    $  0.0925                           $ 0.0000
9/02                                                                    $  0.0965                           $ 0.0000
10/02                                                                   $  0.0965                           $ 0.0000
</Table>

The dividend history represents dividends that were paid on the trust and is no
guarantee of the trust's future dividends.

                                        6
<PAGE>

TOP FIVE SECTORS

(as a percentage of long-term investments)

[INVESTMENT PERFORMANCE GRAPH]

<Table>
<Caption>
                                                                      OCTOBER 31, 2002                   OCTOBER 31, 2001
                                                                      ----------------                   ----------------
<S>                                                           <C>                                <C>
Wholesale Electric                                                         17.10%                             12.30%
Transportation                                                             11.70%                             10.60%
Health Care                                                                11.40%                             14.90%
General Purpose                                                            11.20%                             13.20%
Airport                                                                     9.80%                              7.90%
</Table>

Subject to change daily.

NET ASSET VALUE AND COMMON SHARE MARKET PRICE

(based upon quarter-end values--October 1992 through October 2002)

[INVESTMENT PERFORMANCE GRAPH]

<Table>
<Caption>
                                                                      NET ASSET VALUE               COMMON SHARE MARKET PRICE
                                                                      ---------------               -------------------------
<S>                                                           <C>                                <C>
10/92                                                                     14.9900                            14.5000
                                                                          15.6500                            15.0000
                                                                          16.4700                            15.8750
                                                                          16.9500                            15.8750
                                                                          17.4400                            16.2500
12/93                                                                     17.4400                            16.0000
                                                                          15.4100                            14.1250
                                                                          15.2500                            14.6250
                                                                          14.9900                            13.3750
12/94                                                                     14.3000                            12.7500
                                                                          15.6100                            14.0000
                                                                          15.2300                            13.8750
                                                                          15.4800                            13.5000
12/95                                                                     16.6200                            13.5000
                                                                          15.8200                            13.7500
                                                                          15.6200                            13.5000
                                                                          15.9800                            13.6250
12/96                                                                     16.2400                            13.5000
                                                                          15.9400                            13.7500
                                                                          16.4600                            14.5620
                                                                          16.9400                            15.1250
12/97                                                                     17.3300                            15.5000
                                                                          17.3000                            15.6250
                                                                          17.2600                            15.6250
                                                                          17.8100                            16.6875
12/98                                                                     17.5400                            16.6875
                                                                          17.3800                            16.5625
                                                                          16.5400                            15.1250
                                                                          16.0500                            13.8750
12/99                                                                     15.5000                            13.1250
                                                                          15.9000                            13.2500
                                                                          15.9000                            13.6250
                                                                          16.1400                            14.1250
12/00                                                                     17.0500                            14.6250
                                                                          17.2000                            15.2300
                                                                          16.9600                            15.3200
                                                                          17.3500                            15.8400
12/01                                                                     16.6200                            15.5200
                                                                          16.4800                            14.8000
                                                                          17.0800                            16.1400
                                                                          18.2000                            17.1700
10/02                                                                     17.4800                            16.0400
</Table>

The solid line above represents the trust's net asset value (NAV), which
indicates overall changes in value among the trust's underlying securities. The
trust's common share market price is represented by the dashed line, which
indicates the price the market is willing to pay for shares of the trust at a
given time. Common share market price is influenced by a range of factors,
including supply and demand and market conditions.

                                        7
<PAGE>

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN MUNICIPAL
OPPORTUNITY TRUST ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED
THE MARKETS AND INFLUENCED THE TRUST'S RETURN DURING THE 12 MONTHS ENDED OCTOBER
31, 2002. THE TRUST IS MANAGED BY THE ADVISER'S MUNICIPAL TEAM. CURRENT
MEMBERS(1) OF THE TEAM INCLUDE DENNIS PIETRZAK, EXECUTIVE DIRECTOR; ROBERT
WIMMEL, VICE PRESIDENT; AND JOHN R. REYNOLDSON, EXECUTIVE DIRECTOR. THE
FOLLOWING DISCUSSION REFLECTS THEIR VIEWS ON THE TRUST'S PERFORMANCE DURING THE
12-MONTH PERIOD ENDED OCTOBER 31, 2002.

(1) Team members may change without notice at any time.

Q   WHAT WAS THE MARKET
    ENVIRONMENT OF THE PAST 12 MONTHS, AND HOW DID THE TRUST PERFORM IN THAT
    ENVIRONMENT?

A   The economic backdrop of the past
12 months set the tone for historic levels of activity in the municipal bond
market. The first six months of the fiscal year saw investors wavering between
expectations of economic recovery on the one hand and continued economic malaise
on the other. The Federal Reserve Bank (the "Fed") continued to stimulate the
flagging economy by lowering the federal funds target interest rate three times
over the first three months. With that rate at historic lows, the economy
appeared to be moving gradually into recovery.

    Market sentiment turned decidedly negative in the second half of the period
under review. The economic indicators that had been giving mixed to positive
signals moved into negative territory in October, and from then to the end of
the period the bulk of the economic news came in weaker than expected. This, in
combination with corporate-governance issues and geopolitical concerns, led to a
marked deterioration in investor sentiment and helped push municipal bond yields
to levels not seen since the mid-1960s.

    One of the most significant effects of the drop in yields has been a surge
in issuance. Municipalities moved aggressively to lock in lower financing rates
by issuing new debt as well as refinancing existing obligations originated
during periods of higher interest rates. This wave of new issuance is on track
to lift calendar year 2002 above the record $292 billion in issuance set in
1993.

    Faltering investor sentiment also prolonged the bear market in equities.
Although this has been a painful time for equity investors, it appears to have
been a boon for municipal bond funds. Investors seeking to put their cash to
work have been drawn by the relatively strong performance of municipal bonds and
have poured near-record amounts of money into municipal bond mutual funds.

                                        8
<PAGE>

    This is not to say that the bond market was entirely immune to the bad news
that drove the stock markets down. Much of that news centered on
corporate-governance scandals and the faltering economy. These factors served to
undermine the corporate-backed segments of the municipal market as well and led
to general underperformance by lower-rated bonds relative to AAA paper.

    Looking out along the yield curve, the past 12 months also saw two divergent
periods of performance for intermediate and long-dated municipal bonds. During
the first six months of the period, expectations of economic recovery brought
the inevitable fears of rising interest rates. As a result, the short to
intermediate portion of the curve turned in the best performance for that
period. The long end of the curve rallied sharply in the second half, when hopes
for a quick recovery proved futile. Even with this rally, however, intermediate
bonds still outperformed for the 12-month period.

    The portfolio continued to offer what we believe is a competitive level of
tax-exempt income. The trust's monthly dividend of $0.0965 per share translated
to a distribution rate of 7.22 percent based on the trust's closing common share
market price on October 31, 2002. Based on these figures, investors in the 38.6
percent federal income tax bracket would have to earn a distribution rate of
11.76 percent on a taxable investment to match the tax-exempt yield provided by
the trust.

    For the 12 months ended October 31, 2002, the trust produced a total return
of 11.36 percent based on common share market price. This reflects an increase
in common share market price from $15.65 per share on October 31, 2001, to
$16.04 per share on October 31, 2002. Of course, past performance is no
guarantee of future results. Investment return, common share market price and
net asset value will fluctuate and trust shares, when sold, may be worth more or
less than their original cost. As a result of recent market activity, current
performance may vary from the figures shown. For more-up-to-date information,
please visit vankampen.com or speak with your financial advisor.

    By comparison, the Lehman Brothers Municipal Bond Index posted a total
return of 5.87 percent for the same period. The index is an unmanaged,
broad-based statistical composite of municipal bonds. Index returns do not
include any sales charges or fees that would be paid by an investor purchasing
the securities it represents. Such costs would lower performance. It is not
possible to invest directly in an index. For additional performance results,
please refer to the chart and footnotes on page 4.

Q   WHAT STRATEGIES DID YOU PURSUE
    IN MANAGING THE TRUST?

A   One of our primary strategies was to
realign the portfolio to position it for a changing-interest-rate environment by
focusing on the intermediate part of the yield curve. Our quantitative analysis
indicated that this was the portion of the curve offering the most attractive
total return potential. We focused on premium bonds in the 15- to 20-year
maturity range, which offered a greater income advantage with the interest rate

                                        9
<PAGE>

risk of 10-year bonds. These bonds, with superior risk/reward characteristics,
offered the double advantage of meeting our desired investment profile while
supporting the trust's yield.

    We funded these purchases through the sale of some of the portfolio's
longer, deep-discount securities. We put these bonds into the portfolio in
previous years when they were out of favor. As interest rates fell, however,
they rallied strongly and met our performance objectives handsomely. We sold
them and reinvested the proceeds in a combination of intermediate bonds and
longer bonds with attractive total return prospects. We also continued to follow
our longstanding strategy of trading between states, sectors and coupon
structures as they moved into and out of our range of fair value.

Q   WHAT IS YOUR OUTLOOK FOR THE
    MUNICIPAL MARKET?

A   Our outlook remains as it has
been for most of the past year. Economic activity is likely to pick up at some
point, though it is of course difficult to say when. That said, with long-bond
yields at 30-year lows, we believe the likelihood of an impending turn in the
cycle may be higher than previously thought. As a result, we will continue to
watch the economy closely for any signs of recovery that might induce the Fed to
raise interest rates. We also expect equity market sentiment to continue to be a
key driver of cash flows into our market. Municipal bond funds are likely to
continue to enjoy strong inflows as long as stocks remain weak.

    In order to seek to manage the portfolio's interest-rate exposure in a
changing interest-rate environment, we may purchase or sell financial futures
contracts or engage in transactions involving interest rate swaps, caps, floors
or collars. We expect to enter into these transactions primarily as a hedge
against anticipated interest rate or fixed-income market changes, for duration
management or for risk management purposes.

                                        10
<PAGE>

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

BOND: A debt security issued by a government or corporation that pays the
bondholder a stated rate of interest and repays the principal at the maturity
date.

DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest-rate
movements on its price. Typically, trusts with shorter durations perform better
in rising-rate environments, while trusts with longer durations perform better
when rates decline.

FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, the central bank of the United States. Its policy-making unit, the
Federal Open Market Committee, meets at least eight times a year to establish
monetary policy and monitor the economic pulse of the United States.

FUTURES CONTRACTS: The purchase of a futures contract creates a firm obligation
by the trust, as purchaser, to take delivery from the seller the specific type
of financial instrument called for in the contract at a specific future time for
a specified price. The sale of a futures contract creates a firm obligation by
the trust, as seller, to deliver to the buyer the specific type of financial
instrument called for in the contract at a specific future time for a specified
price.

GENERAL OBLIGATION BONDS: Bonds backed by the full faith and credit (taxing
authority) of the issuer for timely payment of interest and principal. Such
bonds are issued to finance essential government projects, such as highways and
schools.

INTEREST RATE SWAPS, CAPS, FLOORS AND COLLARS: Interest rate swaps involve the
exchange by the trust with another party of their respective commitments to pay
or receive interest, for example, an exchange of floating rate payments for
fixed rate payments with respect to a notional amount of principal. An index
swap is an agreement to swap cash flows on a notational amount based on changes
in the values of the reference indices. The purchase of a cap entitles the
purchaser to receive payments on a notional principal amount from the party
selling such cap to the extent that a specified index exceeds a predetermined
interest rate or amount. The purchase of a floor entitles the purchaser to
receive payments on a notional principal amount from the party selling such
floor to the extent that a specified index falls below a predetermined interest
rate or amount. A collar is a combination of a cap and a floor that preserves a
certain return within a predetermined range of interest rates or values.

                                        11
<PAGE>

                        BY THE NUMBERS

YOUR TRUST'S INVESTMENTS

October 31, 2002
THE FOLLOWING PAGES DETAIL YOUR TRUST'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          MUNICIPAL BONDS  152.4%
          ALABAMA  3.2%
$1,000    Birmingham Baptist Med Ctr AL Baptist Hlth
          Sys Ser A.................................  5.875%    11/15/24   $   1,017,030
 5,000    Jefferson Cnty, AL Swr Rev Cap Impt Wts
          Ser B (FGIC Insd).........................  5.125     02/01/42       5,027,050
 2,435    Marshall Cnty, AL Hlth Care Ser C.........  6.000     01/01/32       2,495,266
   381    Mobile, AL Indl Dev Brd Solid Waste Disp
          Rev Mobile Energy Svc Co Proj Rfdg (a)
          (b).......................................  6.950     01/01/20           3,885
                                                                           -------------
                                                                               8,543,231
                                                                           -------------
          ARIZONA  1.0%
 1,500    Maricopa Cnty, AZ Stadium Dist Rfdg (AMBAC
          Insd).....................................  5.375     06/01/19       1,600,605
 1,000    Scottsdale, AZ Indl Dev Auth Hosp Rev
          Scottsdale Hlthcare.......................  5.800     12/01/31       1,013,430
                                                                           -------------
                                                                               2,614,035
                                                                           -------------
          ARKANSAS  3.3%
 5,000    Arkansas St Fed Hwy Gnt Antic Tax Rev.....  5.000     08/01/13       5,482,650
 3,035    Fort Smith, AR Wtr & Swr Rev Ser A Rfdg
          (FSA Insd)................................  5.250     10/01/16       3,271,032
                                                                           -------------
                                                                               8,753,682
                                                                           -------------
          CALIFORNIA  2.7%
   495    California Rural Home Mtg Fin Auth Single
          Family Mtg Rev Ser C (GNMA
          Collateralized)...........................  7.800     02/01/28         566,919
 5,000    Contra Costa, CA Home Mtg Fin Auth Home
          Mtg Rev (Escrowed to Maturity) (MBIA
          Insd).....................................    *       09/01/17       2,362,400
 4,000    Foothill/Eastern Corridor Agy CA Toll Rd
          Rev Conv Cap Apprec Sr Lien Ser A
          (Escrowed to Maturity) (c)................ 0/7.050    01/01/10       4,248,040
                                                                           -------------
                                                                               7,177,359
                                                                           -------------
</Table>

                                               See Notes to Financial Statements

                                        12
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          COLORADO  4.4%
$2,000    Arapahoe Cnty, CO Cap Impt Tr Fd Hwy Rev
          E-470 Proj Ser B (Prerefunded @
          08/31/05).................................  7.000%    08/31/26   $   2,330,460
 1,505    Arapahoe Cnty, CO Ctfs Partn Rfdg (FSA
          Insd).....................................  5.250     12/01/15       1,668,172
   750    Colorado Hlth Fac Auth Rev Catholic Hlth
          Initiatives...............................  5.250     09/01/21         745,950
 1,000    Colorado Hlth Fac Auth Rev Hosp Portercare
          Adventist Hlth............................  6.500     11/15/31       1,065,900
 1,000    Colorado Hsg Fin Auth Multi-Family Hsg Ins
          Mtg Ser B2 (FHA Gtd)......................  5.800     10/01/28       1,020,460
   531    Colorado Hsg Fin Auth Single Family Pgm Sr
          Ser A2....................................  7.250     05/01/27         556,127
   355    Colorado Hsg Fin Auth Single Family Pgm Sr
          Ser C1....................................  7.550     11/01/27         362,490
 1,000    Denver, CO City & Cnty Arpt Rev Ser B
          (MBIA Insd)...............................  6.250     11/15/07       1,121,520
 1,005    Greeley, CO Multi-Family Rev Hsg Mtg Creek
          Stone (FHA Gtd)...........................  5.950     07/01/28       1,033,683
 1,000    Highlands Ranch Metro Dist No 2 CO Rfdg
          (FSA Insd)................................  6.500     06/15/11       1,213,690
 1,025    Metropolitan Football Stadium Dist CO
          Sales Tax Rev Cap Apprec Ser A (MBIA
          Insd).....................................    *       01/01/11         734,658
                                                                           -------------
                                                                              11,853,110
                                                                           -------------
          CONNECTICUT  2.5%
 3,250    Connecticut St Spl Oblig Pkg Rev Bradley
          Intl Arpt Ser A (ACA Insd)................  6.600     07/01/24       3,472,332
 1,000    Mashantucket Western Pequot Tribe CT Spl
          Rev Ser A, 144A--Private Placement (d)....  6.400     09/01/11       1,079,690
   840    Mashantucket Western Pequot Tribe CT Spl
          Rev Ser A, 144A--Private Placement
          (Escrowed to Maturity) (d)................  6.500     09/01/06         968,209
 1,000    Mashantucket Western Pequot Tribe CT Spl
          Rev Ser A, 144A--Private Placement
          (Prerefunded @ 09/01/07) (d)..............  6.400     09/01/11       1,155,350
                                                                           -------------
                                                                               6,675,581
                                                                           -------------
</Table>

See Notes to Financial Statements

                                        13
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          DELAWARE  1.6%
$2,100    Delaware St Hlth Facs Auth Rev Nanticoke
          Mem Hosp Proj Ser B.......................  5.625%    05/01/32   $   2,106,132
 1,925    Wilmington, DE (FGIC Insd)................  5.375     06/01/16       2,112,225
                                                                           -------------
                                                                               4,218,357
                                                                           -------------
          DISTRICT OF COLUMBIA  1.9%
 5,000    Metropolitan Washington DC Arpts Auth Sys
          Ser A (FGIC Insd).........................  5.250     10/01/32       5,071,200
                                                                           -------------

          FLORIDA  3.1%
 2,000    Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
          Insd).....................................  5.950     07/01/20       2,278,180
 1,350    Lakeland, FL Hosp Sys Rev Lakeland Regl
          Hlth Sys..................................  5.500     11/15/32       1,339,173
 2,100    Miami Dade Cnty, FL Aviation Miami Intl
          Arpt (FGIC Insd)..........................  5.375     10/01/27       2,142,609
 2,375    North Broward, FL Hosp Dist Rev Impt......  6.000     01/15/31       2,455,322
                                                                           -------------
                                                                               8,215,284
                                                                           -------------
          GEORGIA  6.7%
 2,367    Fulton Cnty, GA Lease Rev (e).............  7.250     06/15/10       2,622,944
 7,000    Georgia Muni Elec Auth Pwr Rev Ser A (MBIA
          Insd).....................................  6.500     01/01/20       8,552,180
 6,245    Municipal Elec Auth GA Combustion Turbine
          Proj Ser A (MBIA Insd)....................  5.250     11/01/16       6,752,094
                                                                           -------------
                                                                              17,927,218
                                                                           -------------
          ILLINOIS  14.5%
 2,000    Bolingbrook, IL Cap Apprec Ser C Rfdg
          (MBIA Insd)...............................    *       01/01/23         676,220
 2,000    Chicago, IL Brd of Ed (FGIC Insd).........  5.500     12/01/31       2,083,960
 5,000    Chicago, IL O'Hare Intl Arpt Rev Genl Arpt
          Second Lien Ser A Rfdg (MBIA Insd) (f)....  6.375     01/01/12       5,477,750
 2,000    Chicago, IL Pk Dist Hbr Fac Rev (f).......  5.875     01/01/16       2,188,220
 6,400    Chicago, IL Sch Fin Auth Ser A (MBIA Insd)
          (f).......................................  5.000     06/01/09       6,783,744
   330    Chicago, IL Single Family Mtg Rev Ser A
          (GNMA Collateralized).....................  7.000     09/01/27         335,801
   275    Chicago, IL Single Family Mtg Rev Ser B
          (GNMA Collateralized).....................  7.625     09/01/27         297,245
</Table>

                                               See Notes to Financial Statements

                                        14
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          ILLINOIS (CONTINUED)
$1,000    Chicago, IL Wastewtr Transmission Rev
          (MBIA Insd)...............................  5.750%    01/01/25   $   1,071,940
 2,000    Cook Cnty, IL Cmnty Cap Apprec (FSA
          Insd).....................................    *       12/01/10       1,445,200
 2,500    Du Page Cnty, IL Trans Rev (FSA Insd).....  5.750     01/01/17       2,768,375
 5,845    Du Page, IL Wtr Commn Rfdg................  5.250     03/01/10       6,507,238
 3,285    Illinois Hlth Facs Auth Rev Midwest
          Physician Group Ltd Proj (Prerefunded @
          11/15/04).................................  8.125     11/15/19       3,755,970
   755    Illinois Hsg Dev Auth Rev Homeowner Mtg
          G2........................................  6.050     08/01/29         791,685
 1,000    Metropolitan Pier & Expo Auth IL Dedicated
          St Tax Rev McCormick Pl Expn Proj Rfdg
          (FGIC Insd)...............................  5.500     12/15/24       1,046,720
 1,410    Sangamon Cnty, IL Cmnty Unit Sch Dist No 5
          (FGIC Insd)...............................  6.400     12/01/03       1,480,627
 1,865    Sangamon Cnty, IL Cmnty Unit Sch Dist No 5
          (FGIC Insd)...............................  6.500     12/01/05       2,103,944
                                                                           -------------
                                                                              38,814,639
                                                                           -------------
          INDIANA  3.0%
 3,270    Allen Cnty, IN War Mem Coliseum Ser A
          (AMBAC Insd)..............................  5.500     11/01/16       3,576,203
 1,000    Indiana St Dev Fin Auth Rev Exempt Fac
          Conv Rfdg.................................  5.950     08/01/30         898,990
 1,210    North Adams, IN Cmnty Sch Cap Apprec First
          Mtg (FSA Insd)............................    *       01/15/16         645,112
 2,500    Purdue Univ, IN Univ Rev Student Fee Ser B
          (Prerefunded @ 01/01/05)..................  6.750     07/01/09       2,824,325
                                                                           -------------
                                                                               7,944,630
                                                                           -------------
          IOWA  0.8%
 1,890    Des Moines, IA Pub Pkg Sys Rev Ser A (FGIC
          Insd).....................................  5.750     06/01/17       2,076,562
                                                                           -------------

          KENTUCKY  2.9%
 1,475    Kenton Cnty, KY Arpt Brd Rev Cincinnati/
          Northn KY Intl Arpt Ser A Rfdg (MBIA
          Insd).....................................  6.200     03/01/08       1,654,109
 2,000    Kentucky Hsg Corp Hsg Rev Ser F (FNMA
          Collateralized)...........................  5.450     01/01/32       2,037,720
</Table>

See Notes to Financial Statements

                                        15
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          KENTUCKY (CONTINUED)
$1,250    Kentucky St Tpk Auth Econ Dev
          Revitalization Proj Rfdg (Prerefunded @
          01/01/11) (FSA Insd)......................  5.625%    07/01/13   $   1,406,475
 2,345    Kentucky St Tpk Auth Econ Dev
          Revitalization Proj Rfdg (FSA Insd).......  5.625     07/01/14       2,619,365
                                                                           -------------
                                                                               7,717,669
                                                                           -------------
          MAINE  0.8%
 1,455    Maine Edl Ln Auth Rev Supplemental Pgm Ser
          A1........................................  7.000     12/01/16       1,486,006
   800    Maine Edl Ln Auth Rev Supplemental Pgm Ser
          A2........................................  7.150     12/01/16         817,104
                                                                           -------------
                                                                               2,303,110
                                                                           -------------
          MASSACHUSETTS  3.8%
 4,000    Massachusetts Muni Whsl Elec Co Project 6
          A (MBIA Insd).............................  5.250     07/01/15       4,351,880
 3,000    Massachusetts St Dev Fin Agy Semass Sys
          Ser A (MBIA Insd).........................  5.625     01/01/16       3,243,480
 1,000    Massachusetts St Fed Hwy Grant Antic Nt
          Ser A.....................................  5.750     06/15/15       1,122,130
 1,500    Massachusetts St Hlth & Ed Fac Auth Rev
          Partn Hlthcare Sys Ser C..................  5.750     07/01/32       1,546,410
                                                                           -------------
                                                                              10,263,900
                                                                           -------------
          MICHIGAN  2.9%
 2,000    Michigan St Ctf Part (AMBAC Insd).........  5.500     06/01/27       2,076,820
 1,000    Michigan St Strategic Fd Detroit Edison
          Pollutn Ctl Ser B Rfdg....................  5.650     09/01/29       1,017,300
 4,500    Monroe Cnty, MI Pollutn Ctl Rev Coll
          Detroit Edison Monroe Ser 1 (MBIA Insd)...  6.875     09/01/22       4,655,880
                                                                           -------------
                                                                               7,750,000
                                                                           -------------
          MINNESOTA  0.4%
 1,000    Chaska, MN Elec Rev Ser A.................  6.100     10/01/30       1,054,360
                                                                           -------------

          MISSISSIPPI  1.8%
 3,095    Mississippi Home Corp Single Family Rev
          Mtg Ser C (GNMA Collateralized)...........  7.600     06/01/29       3,423,318
 1,185    Mississippi Home Corp Single Family Rev
          Mtg Ser F (GNMA Collateralized)...........  7.550     12/01/27       1,301,308
                                                                           -------------
                                                                               4,724,626
                                                                           -------------
</Table>

                                               See Notes to Financial Statements

                                        16
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          MISSOURI  2.6%
$2,250    Cape Girardeau Cnty, MO Indl Southeast MO
          Hosp Assoc................................  5.500%    06/01/22   $   2,229,930
 1,000    Saint Charles Cnty, MO Pub Wtr Supply Dist
          No 2 MO Proj Ser A (MBIA Insd)............  5.250     12/01/28       1,024,260
   210    Saint Louis Cnty, MO Single Family Mtg Rev
          (MBIA Insd)...............................  6.900     04/01/16         223,600
 3,000    Sikeston, MO Elec Rev Rfdg (MBIA Insd)
          (f).......................................  6.200     06/01/10       3,525,480
                                                                           -------------
                                                                               7,003,270
                                                                           -------------
          NEVADA  0.7%
 2,000    Reno, NV Sr Lien Retrac Reno Trans Proj
          (AMBAC Insd)..............................  5.125     06/01/32       2,016,180
                                                                           -------------

          NEW HAMPSHIRE  1.0%
 2,500    New Hampshire Hlth & Ed Fac Univ Sys of NH
          (AMBAC Insd)..............................  5.500     07/01/15       2,779,275
                                                                           -------------

          NEW JERSEY  8.5%
20,000    New Jersey Econ Dev Auth St Contract Econ
          Recovery (MBIA Insd) (f)..................  5.900     03/15/21      22,943,600
                                                                           -------------

          NEW MEXICO  1.4%
 3,590    New Mexico Mtg Fin Auth Single Family Mtg
          Pgm Ser G (GNMA Collateralized)...........  7.250     07/01/26       3,833,725
                                                                           -------------

          NEW YORK  17.0%
 2,000    Metropolitan Trans Auth NY Commuter Fac
          Rev Contract (Escrowed to Maturity).......  5.500     07/01/14       2,242,300
 5,000    Metropolitan Trans Auth NY Svc Contract
          Ser A Rfdg (AMBAC Insd)...................  5.000     07/01/30       5,020,600
10,000    New York City Ser A (f)...................  7.000     08/01/07      11,573,200
 3,000    New York City Ser A Rfdg..................  7.000     08/01/05       3,328,980
 2,500    New York St Dorm Auth Lease Mun Hlth Facs
          Impt Ser 1 (FSA Insd).....................  5.500     01/15/12       2,821,250
 1,500    New York St Dorm Auth Rev Mental Hlth Svcs
          Fac Ser A.................................  5.750     08/15/12       1,635,135
 3,800    New York St Mtg Agy Rev Ser 101...........  5.400     04/01/32       3,926,882
 3,500    Port Auth NY & NJ Cons 97th Ser (FGIC
          Insd).....................................  6.650     01/15/23       3,794,945
 4,000    Port Auth NY & NJ Spl Oblig Rev Spl Proj
          JFK Intl Arpt Terminal 6 (MBIA Insd)......  5.750     12/01/22       4,295,560
</Table>

See Notes to Financial Statements

                                        17
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          NEW YORK (CONTINUED)
$4,000    Triborough Brdg & Tunl Auth NY Rev Gen
          Purp Ser B Rfdg...........................  5.000%    11/15/20   $   4,099,920
 3,000    Triborough Brdg & Tunl Auth NY Ser E Rfdg
          (MBIA Insd) (g)...........................  5.000     11/15/32       3,010,500
                                                                           -------------
                                                                              45,749,272
                                                                           -------------
          NORTH CAROLINA  5.4%
 1,500    North Carolina Eastn Muni Pwr Agy Pwr Sys
          Rev Ser D.................................  6.700     01/01/19       1,634,325
11,000    North Carolina Muni Pwr Agy No. 1 Catawba
          Elec Rev Rfdg (MBIA Insd) (f).............  6.000     01/01/12      12,853,170
                                                                           -------------
                                                                              14,487,495
                                                                           -------------
          NORTH DAKOTA  0.4%
 1,180    North Dakota St Hsg Fin Agy Ser C.........  5.550     07/01/29       1,195,918
                                                                           -------------

          OHIO  4.0%
 1,000    Akron, OH Ctfs Partn Akron Muni Baseball
          Stad Proj.................................  6.500     12/01/07       1,092,540
 1,190    Bowling Green St Univ OH (FGIC Insd)......  5.750     06/01/14       1,340,071
   500    Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc
          Proj......................................  7.500     01/01/30         549,640
 3,000    Lucas Cnty, OH Hosp Rev Promedica Hlthcare
          Oblig (MBIA Insd).........................  6.000     11/15/07       3,393,480
 1,500    Mahoning Cnty, OH Hosp Fac Forum Hlth
          Oblig Group Ser A (g).....................  6.000     11/15/32       1,474,335
 1,000    Ohio St Air Quality Dev Auth Rev JMG
          Funding Ltd Partn Proj Rfdg (AMBAC
          Insd).....................................  6.375     04/01/29       1,089,930
 2,585    Pickerington, OH Loc Sch Dist Cap Apprec
          Sch Facs Contr (FGIC Insd)................    *       12/01/10       1,879,812
                                                                           -------------
                                                                              10,819,808
                                                                           -------------
          OKLAHOMA  3.4%
 4,770    McAlester, OK Pub Wks Auth Util Cap Apprec
          (FSA Insd)................................    *       02/01/34         844,433
 1,300    Sapulpa, OK Muni Auth Cap Impt Rev Rfdg
          (FSA Insd)................................  5.750     07/01/30       1,400,815
 1,000    Tulsa Cnty, OK Pub Fac Auth Cap Impt Rev
          (AMBAC Insd)..............................  6.250     11/01/22       1,151,020
</Table>

                                               See Notes to Financial Statements

                                        18
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          OKLAHOMA (CONTINUED)
$2,000    Tulsa, OK Indl Auth Hosp Rev Hillcrest Med
          Cent Proj Rfdg (Escrowed to Maturity)
          (Connie Lee Insd).........................  6.125%    06/01/05   $   2,201,080
 3,140    Tulsa, OK Indl Auth Hosp Rev Hillcrest Med
          Cent Proj Rfdg (Escrowed to Maturity)
          (Connie Lee Insd).........................  6.250     06/01/08       3,647,801
                                                                           -------------
                                                                               9,245,149
                                                                           -------------
          OREGON  2.0%
 5,000    Oregon St Dept Admin Ser C Rfdg (MBIA
          Insd).....................................  5.250     11/01/18       5,321,100
                                                                           -------------

          PENNSYLVANIA  2.0%
 1,000    Harrisburg, PA Cap Apprec Nts Ser F Rfdg
          (AMBAC Insd)..............................    *       03/15/15         567,620
 1,865    Harrisburg, PA Cap Apprec Ser D Rfdg
          (AMBAC Insd)..............................    *       09/15/15       1,034,665
 1,865    Harrisburg, PA Cap Apprec Ser D Rfdg
          (AMBAC Insd)..............................    *       03/15/16         998,129
 1,500    Pennsylvania St Higher Ed UPMC Hlth Sys
          Ser A.....................................  6.000     01/15/31       1,543,095
 1,000    Philadelphia, PA Sch Dist Ser A (FSA
          Insd).....................................  5.750     02/01/13       1,137,310
                                                                           -------------
                                                                               5,280,819
                                                                           -------------
          RHODE ISLAND  0.9%
 1,450    Rhode Island Clean Wtr Fin Agy Rev Fd
          Pooled Ln Issue B.........................  5.000     10/01/19       1,499,808
 1,000    Rhode Island Clean Wtr Fin Agy Rev Fd
          Pooled Ln Issue B.........................  5.000     10/01/20       1,023,920
                                                                           -------------
                                                                               2,523,728
                                                                           -------------
          SOUTH CAROLINA  0.5%
 1,250    Easley, SC Util Rev Comb (FSA Insd).......  5.250     12/01/18       1,335,200
                                                                           -------------

          SOUTH DAKOTA  1.1%
 1,375    Deadwood, SD Ctfs Partn (ACA Insd)........  6.375     11/01/20       1,465,888
 1,285    South Dakota St Hlth & Ed Fac Auth
          Vocational Ed Pgm Ser A (AMBAC Insd)......  5.400     08/01/13       1,407,448
                                                                           -------------
                                                                               2,873,336
                                                                           -------------
</Table>

See Notes to Financial Statements

                                        19
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          TENNESSEE  2.4%
$1,000    Elizabethton, TN Hlth & Ed Fac Brd Rev
          Hosp First Mtg Ser B Impt & Rfdg..........  8.000%    07/01/33   $   1,121,290
 1,000    Johnson City, TN Hlth & Ed Fac Brd Hosp
          Rev First Mtg Mtn St Hlth Ser A Rfdg (MBIA
          Insd).....................................  7.500     07/01/25       1,255,660
 1,890    Wilson Cnty, TN Sch Rfdg (FGIC Insd)......  5.000     04/01/18       1,994,517
 1,990    Wilson Cnty, TN Sch Rfdg (FGIC Insd)......  5.000     04/01/19       2,076,346
                                                                           -------------
                                                                               6,447,813
                                                                           -------------
          TEXAS  14.6%
   980    Austin, TX Utility Sys Rev Comb (AMBAC
          Insd).....................................  6.500     11/15/05       1,104,842
    20    Austin, TX Utility Sys Rev Prerfdg Comb
          (Escrowed to Maturity) (AMBAC Insd).......  6.500     11/15/05          22,637
 2,500    Brazos River Auth TX Pollutn Ctl Rev Adj
          TX Elec Co Proj Ser C Rfdg................  5.750     05/01/36       2,154,350
 2,545    Dallas Cnty, TX Cmnty College Fin Sys
          (AMBAC Insd)..............................  5.375     02/15/17       2,712,003
 3,000    Dallas Cnty, TX Util & Reclamation Dist
          Ser B Rfdg (AMBAC Insd)...................  5.875     02/15/29       3,182,070
 1,500    Dallas-Fort Worth, TX Intl Arpt Rev Jt Ser
          A (FGIC Insd).............................  5.750     11/01/30       1,598,085
 5,500    Dallas-Fort Worth, TX Intl Arpt Rev & Impt
          Jt Ser A Rfdg (FGIC Insd).................  5.500     11/01/31       5,671,215
 2,000    Houston, TX Arpt Sys Rev Sub Lien (FSA
          Insd).....................................  5.500     07/01/20       2,123,820
 3,000    Houston, TX Arpt Sys Rev Sub Lien (FSA
          Insd).....................................  5.000     07/01/32       2,990,580
 3,000    Houston, TX Arpt Sys Rev Sub Lien Ser A
          (FSA Insd)................................  5.625     07/01/30       3,101,550
 5,000    Houston, TX Arpt Sys Rev Sub Lien Ser A
          (FSA Insd)................................  5.125     07/01/32       4,976,950
 1,500    Metropolitan Hlth Fac Dev Corp TX Wilson N
          Jones Mem Hosp Proj.......................  7.250     01/01/31       1,568,010
 5,000    North Cent TX Hlth Fac Dev Hosp Childrens
          Med Ctr Dallas (AMBAC Insd)...............  5.250     08/15/32       5,036,050
 1,750    Sabine River Auth TX Pollutn Ctl Rev TX
          Elec Proj Ser A Rfdg......................  6.450     06/01/21       1,456,770
 1,359    Texas Gen Svcs Comm Partn Int Lease Purch
          Ctfs......................................  7.250     08/01/11       1,383,608
                                                                           -------------
                                                                              39,082,540
                                                                           -------------
</Table>

                                               See Notes to Financial Statements

                                        20
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
PAR
AMOUNT                                                                        MARKET
(000)     DESCRIPTION                                COUPON     MATURITY       VALUE
<C>       <S>                                        <C>        <C>        <C>
          WASHINGTON  18.3%
$9,850    Bellevue, WA Convention Cent Comp Int Rfdg
          (MBIA Insd)...............................    *       02/01/25   $   2,945,446
 3,750    Chelan Cnty, WA Pub Util Dist No. 001 Cons
          Rev Chelan Hydro Ser A (MBIA Insd)........  5.600%    01/01/36       3,908,850
 5,000    Energy Northwest WA Elec Rev Columbia
          Generating Ser A Rfdg (FSA Insd)..........  5.500     07/01/16       5,458,850
 5,000    Grant Cnty, WA Pub Util Dist Ser H Rfdg
          (FSA Insd)................................  5.375     01/01/14       5,508,850
 2,000    Port Seattle, WA Rev Ser B (MBIA Insd)....  5.625     02/01/24       2,079,980
 4,000    Tacoma, WA Elec Sys Rev Ser B Rfdg (FSA
          Insd) (f).................................  5.500     01/01/11       4,498,760
 9,975    Washington St Pub Pwr Supply Ser B (MBIA
          Insd).....................................  5.600     07/01/15      10,373,501
    25    Washington St Pub Pwr Supply Ser B
          (Prerefunded @ 07/01/03) (MBIA Insd)......  5.600     07/01/15          26,157
10,975    Washington St Pub Pwr Supply Sys Nuclear
          Proj No 1 Rev Ser A (MBIA Insd)...........  5.700     07/01/17      11,422,341
 5,125    Washington St Pub Pwr Supply Sys Nuclear
          Proj No 3 Rev Ser C Rfdg (MBIA Insd)......    *       07/01/14       3,001,098
                                                                           -------------
                                                                              49,223,833
                                                                           -------------
          WEST VIRGINIA  3.0%
 8,000    Harrison Cnty, WV Cmnty Solid Waste Disp
          Rev West Penn Pwr Co Proj Ser A (MBIA
          Insd).....................................  6.875     04/15/22       8,195,920
                                                                           -------------

          WISCONSIN  1.7%
 1,500    Southeast WI Professional Baseball Pk Dist
          Sales Tax Rev Ser A Rfdg (MBIA Insd)......  5.500     12/15/20       1,665,660
 2,100    Wisconsin Hsg & Econ Dev Auth Home
          Ownership Rev Ser F.......................  5.250     07/01/29       2,102,604
   670    Wisconsin Hsg & Econ Dev Ser G............  5.950     03/01/31         698,683
                                                                           -------------
                                                                               4,466,947
                                                                           -------------
          WYOMING  0.2%
   465    Wyoming Cmnty Dev Auth Hsg Rev Ser 2......  6.350     06/01/29         487,813
                                                                           -------------
</Table>

See Notes to Financial Statements

                                        21
<PAGE>

YOUR TRUST'S INVESTMENTS

October 31, 2002

<Table>
<Caption>
                                                                              MARKET
DESCRIPTION                                                                    VALUE
<C>       <S>                                        <C>        <C>        <C>
TOTAL LONG-TERM INVESTMENTS  152.4%
  (Cost $378,357,590)...................................................   $ 409,011,294

SHORT-TERM INVESTMENTS  0.8%
  (Cost $2,150,000).....................................................       2,150,000
                                                                           -------------

TOTAL INVESTMENTS  $153.2%
  (Cost $380,507,590)...................................................     411,161,294
OTHER ASSETS IN EXCESS OF LIABILITIES  2.7%.............................       7,255,754
PREFERRED SHARES  (55.9%)...............................................    (150,083,936)
                                                                           -------------

NET ASSETS APPLICABLE TO COMMON SHARES  100.0%..........................   $ 268,333,112
                                                                           =============
</Table>

 * Zero coupon bond

(a) Non-income producing security.

(b) This borrower has filed for protection in federal bankruptcy court.

(c) Security is a "step-up" bond where the coupon increases or steps up at a
    predetermined date.

(d) 144A securities are those which are exempt from registration under Rule 144A
    of the Securities Act of 1933, as amended. These securities may only be
    resold in transactions exempt from registration which are normally those
    transactions with qualified institutional buyers.

(e) These securities are restricted and may be resold only in transactions
    exempt from registration which are normally those transactions with
    qualified institutional buyers.

(f) Assets segregated as collateral for when-issued or delayed delivery purchase
    commitments and open futures transactions.

(g) Securities purchased on a when-issued or delayed delivery basis.

ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FNMA--Federal National Mortgage Association
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.

                                               See Notes to Financial Statements

                                        22
<PAGE>

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
October 31, 2002

<Table>
<S>                                                           <C>
ASSETS:
Total Investments (Cost $380,507,590).......................  $411,161,294
Cash........................................................       144,817
Receivables:
  Investments Sold..........................................     9,287,343
  Interest..................................................     6,088,887
Other.......................................................         4,828
                                                              ------------
    Total Assets............................................   426,687,169
                                                              ------------
LIABILITIES:
Payables:
  Investments Purchased.....................................     7,586,086
  Investment Advisory Fee...................................       214,417
  Variation Margin on Futures...............................        87,797
  Administrative Fee........................................        17,868
  Affiliates................................................         9,400
Accrued Expenses............................................       199,748
Trustees' Deferred Compensation and Retirement Plans........       154,805
                                                              ------------
    Total Liabilities.......................................     8,270,121
Preferred Shares............................................   150,083,936
                                                              ------------
NET ASSETS APPLICABLE TO COMMON SHARES......................  $268,333,112
                                                              ============
NET ASSET VALUE PER COMMON SHARE ($268,333,112 divided by
  15,352,891 shares outstanding)............................  $      17.48
                                                              ============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
  shares authorized, 15,352,891 shares issued and
  outstanding)..............................................  $    153,529
Paid in Surplus.............................................   226,695,485
Net Unrealized Appreciation.................................    30,617,858
Accumulated Net Realized Gain...............................     7,492,557
Accumulated Undistributed Net Investment Income.............     3,373,683
                                                              ------------
NET ASSETS APPLICABLE TO COMMON SHARES......................  $268,333,112
                                                              ============

PREFERRED SHARES ($.01 par value, authorized 100,000,000
  shares, 6,000 issued with liquidation preference of
  $25,000 per share)........................................  $150,000,000
                                                              ============

NET ASSETS INCLUDING PREFERRED SHARES.......................  $418,333,112
                                                              ============
</Table>

See Notes to Financial Statements

                                        23
<PAGE>

Statement of Operations
For the Year Ended October 31, 2002

<Table>
<S>                                                           <C>
INVESTMENT INCOME:
Interest....................................................  $22,589,160
                                                              -----------
EXPENSES:
Investment Advisory Fee.....................................    2,478,266
Administrative Fee..........................................      534,761
Preferred Share Maintenance.................................      395,788
Legal.......................................................       41,169
Custody.....................................................       24,875
Trustees' Fees and Related Expenses.........................       23,374
Other.......................................................      242,650
                                                              -----------
    Total Expenses..........................................    3,740,883
                                                              -----------
NET INVESTMENT INCOME.......................................  $18,848,277
                                                              ===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain...........................................  $ 7,531,948
                                                              -----------
Unrealized Appreciation/Depreciation:
  Beginning of the Period...................................   35,765,313
  End of the Period:
    Investments.............................................   30,653,704
    Futures.................................................      (35,846)
                                                              -----------
                                                               30,617,858
                                                              -----------
Net Unrealized Depreciation During the Period...............   (5,147,455)
                                                              -----------
NET REALIZED AND UNREALIZED GAIN............................  $ 2,384,493
                                                              ===========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS.....................  $(2,627,582)
                                                              ===========
NET INCREASE IN NET ASSETS FROM OPERATIONS..................  $18,605,188
                                                              ===========
</Table>

                                               See Notes to Financial Statements

                                        24
<PAGE>

Statements of Changes in Net Assets

<Table>
<Caption>
                                                         YEAR ENDED         YEAR ENDED
                                                      OCTOBER 31, 2002   OCTOBER 31, 2001
                                                      -----------------------------------
<S>                                                   <C>                <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................   $ 18,848,277       $ 19,392,553
Net Realized Gain....................................      7,531,948          7,960,409
Net Unrealized Appreciation/Depreciation During the
  Period.............................................     (5,147,455)        11,734,453
Distributions to Preferred Shareholders:
  Net Investment Income..............................     (1,453,653)        (4,883,993)
  Net Realized Gain..................................     (1,173,929)          (125,574)
                                                        ------------       ------------
Change in Net Assets from Operations.................     18,605,188         34,077,848
Distributions to Common Shareholders:
  Net Investment Income..............................    (16,611,005)       (14,139,658)
  Net Realized Gain..................................     (3,700,047)               -0-
                                                        ------------       ------------

NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..     (1,705,864)        19,938,190
NET ASSETS:
Beginning of the Period..............................    270,038,976        250,100,786
                                                        ------------       ------------
End of the Period (Including accumulated
  undistributed net investment income of $3,373,683
  and $1,746,294, respectively)......................   $268,333,112       $270,038,976
                                                        ============       ============
</Table>

See Notes to Financial Statements

                                        25
<PAGE>

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<Table>
<Caption>
                                                      -------------------------------
                                                      2002 (a)     2001        2000
                                                      -------------------------------
<S>                                                   <C>         <C>        <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD............  $ 17.59     $ 16.29    $  15.67
                                                      -------     -------    --------
  Net Investment Income.............................     1.23        1.26        1.27
  Net Realized and Unrealized Gain/Loss.............      .15        1.29         .65
Common Share Equivalent of Distributions Paid to
Preferred Shareholders:
  Net Investment Income.............................     (.09)       (.32)       (.40)
  Net Realized Gain.................................     (.08)       (.01)        -0-
                                                      -------     -------    --------
Total from Investment Operations....................     1.21        2.22        1.52
Less Distributions Paid to Common Shareholders:
  Net Investment Income.............................     1.08         .92         .90
  Net Realized Gain.................................      .24         -0-         -0-
                                                      -------     -------    --------
NET ASSET VALUE, END OF THE PERIOD..................  $ 17.48     $ 17.59    $  16.29
                                                      =======     =======    ========
Common Share Market Price at End of the Period......  $ 16.04     $ 15.65    $13.6875
Total Return (b)....................................   11.36%      21.42%       8.28%
Net Assets at End of the Period (In millions).......  $ 268.3     $ 270.0    $  250.1
Ratio of Expenses to Average Net Assets Applicable
  to Common Shares (c)..............................    1.42%       1.58%       1.68%
Ratio of Net Investment Income to Average Net Assets
  Applicable to Common Shares (c)...................    7.17%       7.40%       8.04%
Portfolio Turnover..................................      43%         34%         29%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including
  Preferred Shares (c)..............................     .91%       1.00%       1.03%
Ratio of Net Investment Income to Average Net Assets
  Applicable to Common Shares (d)...................    6.61%       5.54%       5.49%
SENIOR SECURITIES:
Total Preferred Shares Outstanding..................    6,000       6,000       6,000
Asset Coverage Per Preferred Share (e)..............  $69,736     $70,006    $ 66,683
Involuntary Liquidating Preference Per Preferred
  Share.............................................  $25,000     $25,000    $ 25,000
Average Market Value Per Preferred Share............  $25,000     $25,000    $ 25,000
</Table>

(a) As required, effective November 1, 2001, the Trust has adopted the
    provisions of the AICPA Audit and Accounting Guide for Investment Companies
    and began accreting market discount on fixed income securities. The effect
    of this change for the year ended October 31, 2002 was to increase net
    investment income by $.01, decrease net realized and unrealized gains and
    losses per share by $.01 and increase the ratio of net investment income to
    average net assets applicable to common shares by .03%. Per share, ratios
    and supplemental data for periods prior to October 31, 2002 have not been
    restated to reflect this change in presentation.

(b) Total return assumes an investment at the common share market price at the
    beginning of the period indicated, reinvestment of all distributions for the
    period in accordance with the Trust's dividend reinvestment plan, and sale
    of all shares at the closing common share market price at the end of the
    period indicated.

(c) Ratios do not reflect the effect of dividend payments to preferred
    shareholders.

(d) Ratios reflect the effect of dividend payments to preferred shareholders.

(e) Calculated by subtracting the Trust's total liabilities (not including the
    preferred shares) from the Trust's total assets and dividing this by the
    number of preferred shares outstanding.

                                        26
<PAGE>

<Table>
<Caption>
YEAR ENDED OCTOBER 31,
- -----------------------------------------------------------------------------
     1999       1998       1997       1996       1995       1994       1993
- -----------------------------------------------------------------------------
<S> <C>       <C>        <C>        <C>        <C>        <C>        <C>
    $ 17.61   $  16.96   $  16.12   $  15.85   $  14.39   $  17.30   $  14.99
    -------   --------   --------   --------   --------   --------   --------
       1.25       1.26       1.26       1.27       1.28       1.30       1.36
      (1.97)       .64        .83        .27       1.58      (2.92)      2.33
       (.32)      (.35)      (.35)      (.36)      (.39)      (.27)      (.28)
        -0-        -0-        -0-        -0-        -0-        -0-       (.02)
    -------   --------   --------   --------   --------   --------   --------
      (1.04)      1.55       1.74       1.18       2.47      (1.89)      3.39
        .90        .90        .90        .91       1.01       1.02       1.02
        -0-        -0-        -0-        -0-        -0-        -0-        .06
    -------   --------   --------   --------   --------   --------   --------
    $ 15.67   $  17.61   $  16.96   $  16.12   $  15.85   $  14.39   $  17.30
    =======   ========   ========   ========   ========   ========   ========
    $ 13.50   $  16.50   $15.0625   $  13.75   $ 13.625   $  13.00   $ 16.375
    -13.29%     15.91%     16.54%      7.72%     12.70%    -14.96%     20.85%
    $ 240.5   $  270.3   $  260.3   $  247.5   $  243.3   $  220.9   $  265.6
      1.62%      1.61%      1.64%      1.66%      1.75%      1.69%      1.62%
      7.35%      7.25%      7.64%      7.96%      8.45%      8.14%      8.22%
        30%        29%        49%        85%        70%        76%        52%
      1.03%      1.03%      1.03%      1.03%      1.06%      1.05%      1.02%
      5.48%      5.24%      5.51%      5.73%      5.87%      6.43%      6.51%
      6,000      3,000      3,000      3,000      3,000      3,000      3,000
    $65,086   $140,098   $136,771   $132,502   $131,094   $123,637   $138,519
    $25,000   $ 50,000   $ 50,000   $ 50,000   $ 50,000   $ 50,000   $ 50,000
    $25,000   $ 50,000   $ 50,000   $ 50,000   $ 50,000   $ 50,000   $ 50,000
</Table>

See Notes to Financial Statements

                                        27
<PAGE>

NOTES TO
FINANCIAL STATEMENTS

October 31, 2002

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Municipal Opportunity Trust (the "Trust") is registered as a
diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Trust's investment objective is to provide
a high level of current income exempt from federal income tax, consistent with
preservation of capital. The Trust commenced investment operations on April 24,
1992.

    The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

A. SECURITY VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices or, in the absence of
market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services or dealers are valued at
fair value using procedures established in good faith by the Board of Trustees.
Short-term securities with remaining maturities of 60 days or less are valued at
amortized cost, which approximates market value.

B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when-issued or delayed delivery
purchase commitments until payment is made. At October 31, 2002, the Trust had
$7,586,086 of when-issued and delayed delivery purchase commitments.

C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security.

    As required, effective November 1, 2001, the Trust adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began

                                        28
<PAGE>

NOTES TO
FINANCIAL STATEMENTS

October 31, 2002

accreting market discount on fixed income securities. Prior to November 1, 2001,
the Trust did not accrete market discount on fixed income securities daily. The
cumulative effect of this accounting change had no impact on total net assets of
the Trust, but resulted in a $819,497 increase in cost of securities and a
corresponding $819,497 decrease in net unrealized appreciation based on
securities held by the Trust on November 1, 2001.

    The effect of this change for the year ended October 31, 2002 was to
increase net investment income by $78,630, decrease net unrealized depreciation
by $110,669, and decrease net realized gains by $189,299. The Statement of
Changes in Net Assets and Financial Highlights for prior periods have not been
restated to reflect this change in presentation.

D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.

    At October 31, 2002, the cost and related gross unrealized appreciation and
depreciation are as follows:

<Table>
<S>                                                             <C>
Cost of investments for tax purposes........................    $379,799,623
                                                                ============
Gross tax unrealized appreciation...........................      32,761,443
Gross tax unrealized depreciation...........................      (1,399,772)
                                                                ------------
Net tax unrealized appreciation on investments..............    $ 31,361,671
                                                                ============
</Table>

E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.

    The tax character of distributions paid during the years ended October 31,
2002 and 2001 was as follows:

<Table>
<Caption>
                                                                 2002        2001
<S>                                                           <C>           <C>
Distributions paid from:
  Ordinary income...........................................  $  229,243    $3,614
  Long-term capital gain....................................   4,961,634       -0-
                                                              ----------    ------
                                                              $5,190,877    $3,614
                                                              ==========    ======
</Table>

                                        29
<PAGE>

NOTES TO
FINANCIAL STATEMENTS

October 31, 2002

    Due to inherent differences in the recognition of income, expenses and
realized gains/losses under accounting principles generally accepted in the
United States of America and federal income tax purposes, permanent differences
between book and tax basis reporting for the 2002 fiscal year have been
identified and appropriately reclassified. A permanent book and tax difference
relating to expenses which are not deductible for tax purposes totaling $24,273
has been reclassified from accumulated undistributed net investment income to
paid in surplus.

    As of October 31, 2002, the components of distributable earnings on a tax
basis were as follows:

<Table>
<S>                                                             <C>
Undistributed ordinary income...............................    $1,942,714
Undistributed long-term capital gain........................     5,824,197
</Table>

    Net realized gains and losses may differ for financial and tax purposes as a
result of gains or losses recognized for tax purposes on open future
transactions on October 31, 2002.

F. RECLASSIFICATIONS In accordance with the provisions of EITF D-98,
"Classification and Measurement of Redeemable Securities", effective for the
current period, the Trust has reclassified its Auction Preferred Shares ("APS")
outside of permanent equity in the Net Assets section of the Statement of Assets
and Liabilities. In addition, distributions to APS shareholders are now
classified as a component of the "Increase in net assets from operations" on the
Statement of Operations and the Statements of Changes in Net Assets and as a
component of the "Total from investment operations" on the Financial Highlights.
Prior year amounts presented have been reclassified to conform to this period's
presentation. This change has no impact on the net assets applicable to common
shares of the Trust.

2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .60% of the average daily net assets of the Trust. In addition, the
Trust will pay a monthly administrative fee to Van Kampen Investments Inc. or
its affiliates (collectively "Van Kampen"), the Trust's Administrator, at an
annual rate of .05% of the average daily net assets of the Trust. Effective May
15, 2002, this fee was reduced from .20% to .05% of the average daily net assets
of the Trust. The administrative services provided by the Administrator include
record keeping and

                                        30
<PAGE>

NOTES TO
FINANCIAL STATEMENTS

October 31, 2002

reporting responsibilities with respect to the Trust's portfolio and preferred
shares and providing certain services to shareholders.

    For the year ended October 31, 2002, the Trust recognized expenses of
approximately $26,600 representing legal services provided by Skadden, Arps,
Slate, Meagher, & Flom (Illinois), counsel to the Trust, of which a trustee of
the Trust is an affiliated person.

    Under separate Accounting Services and Legal Services agreements, the
Adviser provides accounting and legal services to the Trust. The Adviser
allocates the cost of such services to each trust. For the year ended October
31, 2002, the Trust recognized expenses of approximately $42,600 representing
Van Kampen's cost of providing accounting and legal services to the Trust, which
are reported as part of "Other" and "Legal" expenses, respectively, in the
Statement of Operations.

    Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.

    The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable upon retirement for a
ten-year period and are based upon each trustee's years of service to the Trust.
The maximum annual benefit per trustee under the plan is $2,500.

3. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $175,402,847 and $189,954,458,
respectively.

4. DERIVATIVE FINANCIAL INSTRUMENTS

A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.

    In order to seek to manage the interest rate exposure of the Trust's
portfolio in a changing interest rate environment, the Trust may purchase or
sell financial futures contracts or engage in transactions involving interest
rate swaps, caps, floors or collars. The Trust expects to enter into these
transactions primarily as a hedge against anticipated interest rate or
fixed-income market changes, for duration management or for risk management
purposes, but may also enter into these transactions to generate additional
income. All of the Trust's portfolio holdings, including derivative instruments,
are marked to market each day with the change in value reflected in unrealized
appreciation/depreciation. Upon disposition, a

                                        31
<PAGE>

NOTES TO
FINANCIAL STATEMENTS

October 31, 2002

realized gain or loss is recognized accordingly, except when taking delivery of
a security underlying a futures contract. In this instance, the recognition of
gain or loss is postponed until the disposal of the security underlying the
futures contract. Risks may arise as a result of the potential inability of the
counterparties to meet the terms of their contracts.

    Summarized below are the specific types of derivative financial instruments
used by the Trust.

A. FUTURES CONTRACTS A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and typically closes
the contract prior to the delivery date. These contracts are generally used to
manage the portfolio's effective maturity and duration.

    Upon entering into futures contracts, the Trust maintains, in a segregated
account with its custodian, an amount of cash or liquid securities with a value
equal to a percentage of the contract amount with either a futures commission
merchant pursuant to rules and regulations promulgated under the 1940 Act, or
with its custodian in an account in the broker's name. This amount is known as
initial margin. During the period the futures contract is open, payments are
received from or made to the broker based upon changes in the value of the
contract (the variation margin).

    Transactions in futures contracts, each with a par value of $100,000, for
the year ended October 31, 2002, were as follows:

<Table>
<Caption>
                                                              CONTRACTS
<S>                                                           <C>
Outstanding at October 31, 2001.............................     -0-
Futures Opened..............................................     291
                                                                 ---
Outstanding at October 31, 2002.............................     291
                                                                 ===
</Table>

                                        32
<PAGE>

NOTES TO
FINANCIAL STATEMENTS

October 31, 2002

    The futures contracts outstanding as of October 31, 2002, and the
description and unrealized appreciation/depreciation were as follows:

<Table>
<Caption>
                                                                            UNREALIZED
                                                                           APPRECIATION/
                                                              CONTRACTS    DEPRECIATION
<S>                                                           <C>          <C>
Short Contracts:
  U.S. Treasury Notes 5 Year Futures, December 2002 (Current
    Notional Value of $113,734 per contract)................     235         $(48,733)
  U.S. Treasury Notes 10 Year Futures, December 2002
    (Current Notional Value of $114,719 per contract).......      56           12,887
                                                                 ---         --------
                                                                 291         $(35,846)
                                                                 ===         ========
</Table>

5. PREFERRED SHARES

The Trust has outstanding 6,000 Auction Preferred Shares ("APS") in two series
of 3,000 shares each. Dividends are cumulative and the dividend rate on each
series is currently reset every 28 days through an auction process. The average
rate in effect on October 31, 2002 was 1.825%. During the year ended October 31,
2002, the rates ranged from 1.300% to 2.950%.

    The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of "Preferred Share
Maintenance" expense in the Statement of Operations.

    The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.

                                        33
<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Board of Trustees and Shareholders of Van Kampen Municipal Opportunity
Trust

We have audited the accompanying statement of assets and liabilities of Van
Kampen Municipal Opportunity Trust (the "Trust"), including the portfolio of
investments, as of October 31, 2002, the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
three years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The Trust's financial highlights for the periods ended
prior to October 31, 2000, were audited by other auditors whose report, dated
December 6, 1999, expressed an unqualified opinion on those financial
highlights.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2002 by correspondence with the Trust's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen Municipal Opportunity Trust as of October 31, 2002, the results of its
operations, the changes in its net assets and the financial highlights for the
respective stated periods, in conformity with accounting principles generally
accepted in the United States of America.

DELOITTE & TOUCHE LLP
Chicago, Illinois
December 6, 2002

                                        34
<PAGE>

DIVIDEND REINVESTMENT PLAN

    The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.

    If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.

HOW TO PARTICIPATE

    If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be
re-registered in your own name which will enable your participation in the Plan.

HOW THE PLAN WORKS

    Participants in the Plan will receive the equivalent in Common Shares valued
on the valuation date, generally at the lower of market price or net asset
value, except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in

                                        35
<PAGE>

the acquisition of fewer Common Shares than if the dividend or distribution had
been paid in Common Shares issued by the Trust. All reinvestments are in full
and fractional Common Shares and are carried to three decimal places.

    Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.

COSTS OF THE PLAN

    The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.

TAX IMPLICATIONS

    You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.

RIGHT TO WITHDRAW

    Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at:

       Van Kampen Funds Inc.
        Attn: Closed-End Funds
         2800 Post Oak Blvd.
          Houston, TX 77056

                                        36
<PAGE>

BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
VAN KAMPEN MUNICIPAL OPPORTUNITY TRUST

BOARD OF TRUSTEES

DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
THEODORE A. MYERS
RICHARD F. POWERS, III* - Chairman
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*

INVESTMENT ADVISER

VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555

CUSTODIAN AND TRANSFER AGENT

STATE STREET BANK
AND TRUST COMPANY
c/o EquiServe
P.O. Box 43011
Providence, Rhode Island 02940-3011


LEGAL COUNSEL

SKADDEN, ARPS, SLATE,
MEAGHER, & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606

INDEPENDENT AUDITORS

DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601

 For federal income tax purposes, the following information is furnished with
 respect to the distributions paid by the Trust during its taxable year ended
 October 31, 2002. The Trust designated 98.7% of the income distributions as a
 tax-exempt income distribution. Additionally, during the period the Trust
 designated and paid $4,961,634 as a long-term capital gain distribution. In
 January, the Trust provides tax information to shareholders for the preceding
 calendar year.

*   "Interested persons" of the Trust, as defined in the Investment Company Act
    of 1940, as amended.

                                        37
<PAGE>

RESULTS OF
SHAREHOLDER VOTES

The Annual Meeting of Shareholders of the Trust was held on June 12, 2002, where
shareholders voted on the election of trustees.

With regard to the election of the following trustees by common shareholders of
the Trust:

<Table>
<Caption>
                                                                 # OF SHARES
                                                        ------------------------------
                                                         IN FAVOR             WITHHELD
- --------------------------------------------------------------------------------------
<S>                                                     <C>                   <C>
David C. Arch.........................................  13,105,676            123,825
Howard J Kerr.........................................  13,096,249            133,252
</Table>

The other trustees of the Trust whose terms did not expire in 2002 are Hugo F.
Sonnenschein, Rod Dammeyer, Theodore A. Myers, Richard F. Powers, III, and Wayne
W. Whalen.

                                        38
<PAGE>

TRUSTEE AND OFFICER INFORMATION

The business and affairs of the Trust are managed under the direction of the
Trust's Board of Trustees and the Trust's officers appointed by the Board of
Trustees. The tables below list the trustees and officers of the Trust and their
principal occupations for the last five years, other directorships held by the
trustees and their affiliations, if any, with Van Kampen Investments Inc. ("Van
Kampen Investments"), Van Kampen Investment Advisory Corp. ("Advisory Corp."),
Van Kampen Asset Management Inc. ("Asset Management"), Van Kampen Funds Inc.
(the "Distributor"), Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Van
Kampen Investor Services Inc. ("Investor Services"). Advisory Corp. and Asset
Management sometimes are referred to herein collectively as the "Advisers." For
purposes hereof, the term "Fund Complex" includes each of the investment
companies advised by the Advisers. Trustees serve three year terms or until
their successors are duly elected and qualified. Officers are annually elected
by the trustees.

INDEPENDENT TRUSTEES:
<Table>
<Caption>
                                                                                                    NUMBER OF
                                         TERM OF                                                     FUNDS IN
                                        OFFICE AND                                                     FUND
                           POSITION(S)  LENGTH OF                                                    COMPLEX
NAME, AGE AND ADDRESS       HELD WITH      TIME     PRINCIPAL OCCUPATION(S)                          OVERSEEN
OF INDEPENDENT TRUSTEE        TRUST       SERVED    DURING PAST 5 YEARS                             BY TRUSTEE
<S>                        <C>          <C>         <C>                                             <C>
David C. Arch (57)         Trustee      Trustee     Mr. Arch is Chairman and Chief Executive            37
Blistex Inc.                            since 1992  Officer of Blistex Inc., a consumer health
1800 Swift Drive                                    care products manufacturer, and former
Oak Brook, IL 60523                                 Director of the World Presidents
                                                    Organization-Chicago Chapter. Mr. Arch is also
                                                    a Trustee or Managing General Partner of other
                                                    investment companies advised by the Advisers.

<Caption>

NAME, AGE AND ADDRESS      OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE     HELD BY TRUSTEE
<S>                        <C>
David C. Arch (57)         Mr. Arch is a member of
Blistex Inc.               the Board of Directors of
1800 Swift Drive           the Heartland Alliance, a
Oak Brook, IL 60523        non-profit organization
                           serving human needs based
                           in Chicago.
</Table>

                                        39
<PAGE>
<Table>
<Caption>
                                                                                                    NUMBER OF
                                         TERM OF                                                     FUNDS IN
                                        OFFICE AND                                                     FUND
                           POSITION(S)  LENGTH OF                                                    COMPLEX
NAME, AGE AND ADDRESS       HELD WITH      TIME     PRINCIPAL OCCUPATION(S)                          OVERSEEN
OF INDEPENDENT TRUSTEE        TRUST       SERVED    DURING PAST 5 YEARS                             BY TRUSTEE
<S>                        <C>          <C>         <C>                                             <C>
Rod Dammeyer (62)          Trustee      Trustee     Mr. Dammeyer is President of CAC, llc., a           37
CAC, llc.                               since 1992  private company offering capital investment
676 North Michigan Avenue                           and management advisory services. Mr. Dammeyer
Suite 2800                                          is also a Trustee or Managing General Partner
Chicago, IL 60611                                   of other investment companies advised by the
                                                    Advisers. Prior to February 2001, Mr. Dammeyer
                                                    was Vice Chairman and Director of Anixter
                                                    International, Inc. and IMC Global Inc. Prior
                                                    to July 2000, Mr. Dammeyer was a Managing
                                                    Partner of Equity Group Corporate Investment
                                                    (EGI), a company that makes private
                                                    investments in other companies. Prior to 1997,
                                                    Mr. Dammeyer was President, Chief Executive
                                                    Officer and a Director of Great American
                                                    Management & Investment, Inc., a diversified
                                                    manufacturing company.

<Caption>

NAME, AGE AND ADDRESS      OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE     HELD BY TRUSTEE
<S>                        <C>
Rod Dammeyer (62)          Mr. Dammeyer is a member
CAC, llc.                  of the Board of Directors
676 North Michigan Avenue  of TeleTech Holdings
Suite 2800                 Inc., Stericycle, Inc.,
Chicago, IL 60611          GATX Corporation,
                           Therasence, Inc. and
                           Peregrine Systems Inc.
                           and a member of the Board
                           of Trustees of the
                           University of Chicago
                           Hospitals and Health
                           Systems. Prior to July
                           2000, Mr. Dammeyer was a
                           member of the Board of
                           Directors of Allied Riser
                           Communications Corp.,
                           Matria Healthcare Inc.,
                           Transmedia Networks,
                           Inc., CNA Surety, Corp.
                           and Grupo Azcarero Mexico
                           (GAM). Prior to April
                           1999, Mr. Dammeyer was a
                           Director of Metal
                           Management, Inc. Prior to
                           1998, Mr. Dammeyer was a
                           Director of Lukens, Inc.,
                           Capsure Holdings Corp.,
                           Revco D.S., Inc., the
                           Chase Manhattan
                           Corporation National
                           Advisory Board and Sealy,
                           Inc. Prior to 1997, Mr.
                           Dammeyer was a Director
                           of Flacon Building
                           Products, Inc.
</Table>

                                        40
<PAGE>
<Table>
<Caption>
                                                                                                    NUMBER OF
                                         TERM OF                                                     FUNDS IN
                                        OFFICE AND                                                     FUND
                           POSITION(S)  LENGTH OF                                                    COMPLEX
NAME, AGE AND ADDRESS       HELD WITH      TIME     PRINCIPAL OCCUPATION(S)                          OVERSEEN
OF INDEPENDENT TRUSTEE        TRUST       SERVED    DURING PAST 5 YEARS                             BY TRUSTEE
<S>                        <C>          <C>         <C>                                             <C>
Howard J Kerr (67)         Trustee      Trustee     Mr. Kerr is a Trustee or Managing General           37
736 North Western Avenue                since 1992  Partner of other investment companies advised
P.O. Box 317                                        by the Advisers. Prior to 1998, Mr. Kerr was
Lake Forest, IL 60045                               the President and Chief Executive Officer of
                                                    Pocklington Corporation, Inc., an Investment
                                                    holding company.
Theodore A. Myers (72)     Trustee      Trustee     Mr. Myers is a financial consultant. Mr. Myers      37
550 Washington Avenue                   since 1992  is also a Trustee or Managing General Partner
Glencoe, IL 60022                                   of other investment companies advised by the
                                                    Advisers. Prior to 1998, Mr. Myers was a
                                                    Senior Financial Advisor (and, prior to 1997,
                                                    an Executive Vice President, Chief Financial
                                                    Officer and Director) of Qualitech Steel
                                                    Corporation, a producer of high quality
                                                    engineered steels for automotive,
                                                    transportation and capital goods industries.
                                                    Prior to 1997, Mr. Myers was a member of the
                                                    Arthur Andersen Chief Financial Officers'
                                                    Committee.

<Caption>

NAME, AGE AND ADDRESS      OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE     HELD BY TRUSTEE
<S>                        <C>
Howard J Kerr (67)         Mr. Kerr is a Director of
736 North Western Avenue   Canbra Foods, Ltd., a
P.O. Box 317               Canadian oilseed
Lake Forest, IL 60045      crushing, refining,
                           processing and packaging,
                           operations, the Marrow
                           Foundation and Lake
                           Forest Bank & Trust.
Theodore A. Myers (72)     Mr. Myers is a Director
550 Washington Avenue      of Met Life Investors
Glencoe, IL 60022          (formerly known as COVA
                           Financial Life
                           Insurance). Prior to
                           1997, Mr. Myers was a
                           Director of McLouth
                           Steel.
</Table>

                                        41
<PAGE>
<Table>
<Caption>
                                                                                                    NUMBER OF
                                         TERM OF                                                     FUNDS IN
                                        OFFICE AND                                                     FUND
                           POSITION(S)  LENGTH OF                                                    COMPLEX
NAME, AGE AND ADDRESS       HELD WITH      TIME     PRINCIPAL OCCUPATION(S)                          OVERSEEN
OF INDEPENDENT TRUSTEE        TRUST       SERVED    DURING PAST 5 YEARS                             BY TRUSTEE
<S>                        <C>          <C>         <C>                                             <C>
Hugo F. Sonnenschein (62)  Trustee      Trustee     Mr. Sonnenschein is President Emeritus and          37
1126 E. 59th Street                     since 1994  Honorary Trustee of the University of Chicago
Chicago, IL 60637                                   and the Hutchinson Distinguished Service
                                                    Professor in the Department of Economics at
                                                    the University of Chicago. Prior to July 2000,
                                                    Mr. Sonnenschein was President of the
                                                    University of Chicago. Mr. Sonnenschein is a
                                                    member of the Board of Trustees of the
                                                    University of Rochester and a member of its
                                                    investment committee. Mr. Sonnenschein is a
                                                    member of the National Academy of Sciences,
                                                    the American Philosophical Society, and a
                                                    fellow of the American Academy of Arts and
                                                    Sciences. Mr. Sonnenschein is also a Trustee
                                                    or Managing General Partner of other
                                                    investment companies advised by the Advisers.

<Caption>

NAME, AGE AND ADDRESS      OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE     HELD BY TRUSTEE
<S>                        <C>
Hugo F. Sonnenschein (62)  Mr. Sonnenschein is a
1126 E. 59th Street        Director of Winston
Chicago, IL 60637          Laboratories, Inc.
</Table>

                                        42
<PAGE>

INTERESTED TRUSTEES*:
<Table>
<Caption>
                                                                                                    NUMBER OF
                                         TERM OF                                                     FUNDS IN
                                        OFFICE AND                                                     FUND
                           POSITION(S)  LENGTH OF                                                    COMPLEX
NAME, AGE AND ADDRESS       HELD WITH      TIME     PRINCIPAL OCCUPATION(S)                          OVERSEEN
OF INTERESTED TRUSTEE         TRUST       SERVED    DURING PAST 5 YEARS                             BY TRUSTEE
<S>                        <C>          <C>         <C>                                             <C>
Richard F. Powers, III*    Chairman     Trustee     Mr. Powers is Chairman of the Board. Trustee/       96
(56)                                    since 1999  Director of funds in the Fund Complex. Prior
1 Parkview Plaza                                    to December 2002, Mr. Powers was Chairman,
Oakbrook Terrace, IL                                Director, President, Chief Executive Officer
60181                                               and Managing Director of Van Kampen; Chairman,
                                                    Director, Chief Executive Officer and Managing
                                                    Director of the Advisers, Distributor, Van
                                                    Kampen Advisors Inc. and Van Kampen Management
                                                    Inc.; Director of other subsidiaries of Van
                                                    Kampen; and Chief Sales and Marketing Officer
                                                    of Morgan Stanley Asset Management Inc. Prior
                                                    to May 1998, Mr. Powers was Executive Vice
                                                    President; and Director of Marketing of Morgan
                                                    Stanley and Director of Dean Witter Discover &
                                                    Co. and Dean Witter Realty. Prior to 1996, Mr.
                                                    Powers was Director of Dean Witter Reynolds
                                                    Inc.
Wayne W. Whalen* (63)      Trustee      Trustee     Mr. Whalen is a Partner in the law firm of          96
333 West Wacker Drive                   since 1992  Skadden, Arps, Slate, Meagher & Flom
Chicago, IL 60606                                   (Illinois), legal counsel to certain funds
                                                    advised by the Advisers. Mr. Whalen is a
                                                    Trustee, Director or Managing General Partner
                                                    of other funds advised by the Advisers.

<Caption>

NAME, AGE AND ADDRESS      OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE      HELD BY TRUSTEE
<S>                        <C>
Richard F. Powers, III*
(56)
1 Parkview Plaza
Oakbrook Terrace, IL
60181
Wayne W. Whalen* (63)
333 West Wacker Drive
Chicago, IL 60606
</Table>

* Such trustee is an "interested person" (within the meaning of Section 2(a)(19)
  of the 1940 Act). Mr. Whalen is an interested person to certain of the funds
  in the Fund Complex by reason of his firm currently acting as legal counsel to
  such funds in the Fund Complex. Mr. Powers is an interested person of such
  funds in the Fund Complex and the Advisers by reason of their positions with
  Morgan Stanley or its affiliates.

                                        43
<PAGE>

OFFICERS:

<Table>
<Caption>
                                                   TERM OF
                                                  OFFICE AND
                                 POSITION(S)      LENGTH OF
NAME, AGE AND                     HELD WITH          TIME     PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER                  TRUST           SERVED    DURING PAST 5 YEARS
<S>                           <C>                 <C>         <C>
Stephen L. Boyd (61)          Vice President      Officer     Managing Director and Chief Investment Officer of Van Kampen
2800 Post Oak Blvd.                               since 1998  Investments, and Managing Director and President of the
45th Floor                                                    Advisers and Van Kampen Advisors Inc. Executive Vice
Houston, TX 77056                                             President and Chief Investment Officer of funds in the Fund
                                                              Complex. Prior to December 2000, Executive Vice President
                                                              and Chief Investment Officer of Van Kampen Investments, and
                                                              President and Chief Operating Officer of the Advisers. Prior
                                                              to April 2000, Executive Vice President and Chief Investment
                                                              Officer for Equity Investments of the Advisers. Prior to
                                                              October 1998, Vice President and Senior Portfolio Manager
                                                              with AIM Capital Management, Inc. Prior to February 1998,
                                                              Senior Vice President and Portfolio Manager of Van Kampen
                                                              American Capital Asset Management, Inc., Van Kampen American
                                                              Capital Investment Advisory Corp. and Van Kampen American
                                                              Capital Management, Inc.
</Table>

                                        44
<PAGE>

<Table>
<Caption>
                                                   TERM OF
                                                  OFFICE AND
                                 POSITION(S)      LENGTH OF
NAME, AGE AND                     HELD WITH          TIME     PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER                  TRUST           SERVED    DURING PAST 5 YEARS
<S>                           <C>                 <C>         <C>
Mitchell M. Merin (49)        President and       Officer     President and Chief Executive Officer of funds in the Fund
1221 Avenue of the Americas   Chief Executive     since 2002  Complex since December 2002. Trustee/Director of certain
New York, NY 10020            Officer                         funds in the Fund Complex. President and Chief Operating
                                                              Officer of Morgan Stanley since December 1998. President and
                                                              Director since April 1997 and Chief Executive Officer since
                                                              June 1998 of Morgan Stanley Investment Advisors Inc. and
                                                              Morgan Stanley Services Company Inc. Chairman, Chief
                                                              Executive Officer and Director of Morgan Stanley
                                                              Distributors Inc. since June 1998. Chairman since June 1998,
                                                              and Director since January 1998 of Morgan Stanley Trust.
                                                              Director of various Morgan Stanley subsidiaries. President
                                                              of the Morgan Stanley Funds since May 1999. Previously Chief
                                                              Strategic Officer of Morgan Stanley Investment Advisors Inc.
                                                              and Morgan Stanley Services Company Inc. and Executive Vice
                                                              President of Morgan Stanley Distributors Inc. April 1997-
                                                              June 1998, Vice President of the Morgan Stanley Funds May
                                                              1997-April 1999, and Executive Vice President of Dean
                                                              Witter, Discover & Co. prior to May 1997.
Joseph J. McAlinden (59)      Chief Investment    Officer     Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas   Officer             since 2002  Stanley Investment Advisors Inc. and Director of Morgan
New York, NY 10020                                            Stanley Trust for 5 years.
</Table>

                                        45
<PAGE>

<Table>
<Caption>
                                                   TERM OF
                                                  OFFICE AND
                                 POSITION(S)      LENGTH OF
NAME, AGE AND                     HELD WITH          TIME     PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER                  TRUST           SERVED    DURING PAST 5 YEARS
<S>                           <C>                 <C>         <C>
A. Thomas Smith III (45)      Vice President and  Officer     Managing Director and Director of Van Kampen Investments,
1221 Avenue of Americas       Secretary           since 1999  Director of the Advisers, Van Kampen Advisors Inc., the
New York, NY 10020                                            Distributor, Investor Services and certain other
                                                              subsidiaries of Van Kampen Investments. Managing Director
                                                              and General Counsel-Mutual Funds of Morgan Stanley
                                                              Investment Advisors, Inc. Vice President or Principal Legal
                                                              Officer and Secretary of funds in the Fund Complex. Prior to
                                                              July 2001, Managing Director, General Counsel, Secretary and
                                                              Director of Van Kampen Investments, the Advisers, the
                                                              Distributor, Investor Services, and certain other
                                                              subsidiaries of Van Kampen Investments. Prior to December
                                                              2000, Executive Vice President, General Counsel, Secretary
                                                              and Director of Van Kampen Investments, the Advisers, Van
                                                              Kampen Advisors Inc., the Distributor, Investor Services and
                                                              certain other subsidiaries of Van Kampen Investments. Prior
                                                              to January 1999, Vice President and Associate General
                                                              Counsel to New York Life Insurance Company ("New York
                                                              Life"), and prior to March 1997, Associate General Counsel
                                                              of New York Life. Prior to December 1993, Assistant General
                                                              Counsel of The Dreyfus Corporation. Prior to August 1991,
                                                              Senior Associate, Willkie Farr & Gallagher. Prior to January
                                                              1989, Staff Attorney at the Securities and Exchange
                                                              Commission, Division of Investment Management, Office of
                                                              Chief Counsel.
John R. Reynoldson (49)       Vice President      Officer     Executive Director of the Advisers and Van Kampen Advisors
1 Parkview Plaza                                  since 2000  Inc. Vice President of funds in the Fund Complex. Prior to
Oakbrook Terrace, IL 60181                                    July 2001, Principal and Co- head of the Fixed Income
                                                              Department of the Advisers and Van Kampen Advisors Inc.
                                                              Prior to December 2000, Senior Vice President of the
                                                              Advisers and Van Kampen Advisors Inc. Prior to May 2000, he
                                                              managed the investment grade taxable group for the Advisers
                                                              since July 1999. From July 1988 to June 1999, he managed the
                                                              government securities bond group for Asset Management. Mr.
                                                              Reynoldson has been with Asset Management since April 1987.
John L. Sullivan (47)         Vice President,     Officer     Executive Director of Van Kampen Investments, the Advisers
1 Parkview Plaza              Chief Financial     since 1998  and Van Kampen Advisors Inc. Vice President, Chief Financial
Oakbrook Terrace, IL 60181    Officer and                     Officer and Treasurer of funds in the Fund Complex. Head of
                              Treasurer                       Fund Accounting for Morgan Stanley Investment Management.
</Table>

                                        46
<PAGE>

<Table>
<Caption>
                                                   TERM OF
                                                  OFFICE AND
                                 POSITION(S)      LENGTH OF
NAME, AGE AND                     HELD WITH          TIME     PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER                  TRUST           SERVED    DURING PAST 5 YEARS
<S>                           <C>                 <C>         <C>
John H. Zimmermann, III (44)  Vice President      Officer     Managing Director and Director of Van Kampen Investments,
Harborside Financial Center                       since 2000  and Managing Director, President and Director of the
Plaza 2 - 7th Floor                                           Distributor. Vice President of funds in the Fund Complex.
Jersey City, NJ 07311                                         Prior to December 2000, President of Van Kampen Insurance
                                                              Agency of Illinois Inc., and Senior Vice President and
                                                              Director of Van Kampen Investments. From November 1992 to
                                                              December 1997, Mr. Zimmermann was Senior Vice President of
                                                              the Distributor.
</Table>

                                        47
<PAGE>

Van Kampen
Privacy Notice

The Van Kampen companies and investment products* respect your right to privacy.
We also know that you expect us to conduct and process your business in an
accurate and efficient manner. To do so, we must collect and maintain certain
nonpublic personal information about you. This is information we collect from
you on applications or other forms, and from the transactions you make with us,
our affiliates, or third parties. We may also collect information you provide
when using our web site, and text files (a.k.a. "cookies") may be placed on your
computer to help us to recognize you and to facilitate transactions you
initiate. We do not disclose any nonpublic personal information about you or any
of our former customers to anyone, except as permitted by law. For instance, so
that we may continue to offer you Van Kampen investment products and services
that meet your investing needs, and to effect transactions that you request or
authorize, we may disclose the information we collect to companies that perform
services on our behalf, such as printers and mailers that assist us in the
distribution of investor materials. These companies will use this information
only for the services for which we hired them, and are not permitted to use or
share this information for any other purpose. To protect your nonpublic personal
information internally, we permit access to it only by authorized employees, and
maintain physical, electronic and procedural safeguards to guard your nonpublic
personal information.

* Includes Van Kampen Investments Inc., Van Kampen Investment Advisory Corp.,
  Van Kampen Asset Management Inc., Van Kampen Advisors Inc., Van Kampen
  Management Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc., Van
  Kampen Trust Company, Van Kampen System Inc. and Van Kampen Exchange Corp., as
  well as the many Van Kampen mutual funds and Van Kampen unit investment
  trusts.

Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com

                         [VAN KAMPEN INVESTMENTS LOGO]
Copyright (C)2002 Van Kampen Funds Inc. All rights reserved.
VMO ANR 12/02                                                  Member NASD/SIPC.
                                                                8740L02-AS-12/02

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</DOCUMENT>
</SEC-DOCUMENT>
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